Selecting a Travel Management Company

The travel management company is a travel manager's primary partner. The TMC's evolving role has been a hot topic as technology rises that some think can perform TMC tasks. For the foreseeable future, however, TMCs will remain an integral part of corporate managed travel, as a central clearinghouse for booking, traveler service, third-party tech services and data. The following outline lays out the traditional concerns addressed in RFPs and contracts with TMCs. While some advocate a more informal process and less paperwork, the formal RFP remains the most common sourcing process by far.

Survey travelers and budget heads about their perceptions and experiences; engage your internal travel council, if one exists. Consider establishing performance benchmarks in key locations using different TMCs.

Well before embarking on a TMC sourcing project, consider an audit of your existing service provider and a technology assessment, and develop one-, two- and five-year travel operations plans. Coordinate with your legal and risk departments on the best approach to traveler safety issues.

Assess the program that evaluates the agency agreements in place today, the service delivery model, technology, program compliance and reporting. From this, develop business requirements against which service providers will deliver.

Does or will your company contract directly with an online booking tool provider, or is that tool part of the TMC's offerings? Consider parallel bids for both scenarios.

U.S. companies that get an Airlines Reporting Corp. Corporate Travel Department designation can collect data, commissions and overrides and select whether to handle travel management functions in-house or to outsource them.

Document any requirements for mobile apps and other tools and technologies that you want to be part of your service offering.

Obtain senior management authority. Set up an advisory committee of travel arrangers, frequent travelers and managers from finance, procurement, information technology,HR, physical security and legal. Consider a forming a subcommittee to evaluate proposals. Determine decision governance. Consider running workshops with four or five TMCs, including incumbents, and invite the advisory committee.

Assess whether you wish to do this in-house or to outsource part of the selection process. Consider hiring a consulting firm, but check for conflicts of interest.

Communicate with the incumbent TMC a year in advance of any plans to rebid. Be aware of cancellation clauses in your current contract, such as those that prevent early solicitation; never agree to such terms. Make sure you have contractual language that addresses a three- to four-month transitional service obligation, should the incumbent not win the bid.

Understand your internal approval process and the levels of approval required to award the bid, especially if the incumbent does not win.